28165.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE JOINT APPLICATION AND PETITION OF PACIFICORP AND SCOTTISH POWER PLC FOR A DECLARATORY ORDER OR ORDER APPROVING PROPOSED TRANSACTION AND AN ORDER APPROVING THE ISSUANCE OF PACIFICORP COMMON STOCK.
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CASE NO. PACE991

ORDER NO. 28165

SUMMARY
On September 13, 1999, the Idaho Irrigation Pumpers Association (Irrigators) filed a Motion to Reopen the technical proceeding in this case. For the reasons set forth below, we deny the Irrigators Motion to Reopen. We find that the matter was adequately briefed and that oral argument is unnecessary. Our denial of the Irrigators’ Motion should not be construed as any indication of a final decision on the merits of the proposed merger of PacifiCorp and ScottishPower (referred to hereinto as “Joint Applicants”).

BACKGROUND
Pursuant to Order No. 28116 issued on August 5, 1999, and in a verbal ruling following the conclusion of the public hearing conducted in Preston, Idaho on August 31, 1999 (Tr. Vol. XI, p. 1624), the Commission adopted September 10, 1999 as the date on which the record in this case would be formally closed. The Commission allowed the parties to submit written briefs advocating their positions in this case on or before the September 10, 1999 closing date.
Motion
The Irrigators base their Motion to Reopen on four grounds:
1. Merger Credit
The Irrigators contend that the merger credit recently proposed by ScottishPower in this case “presupposes further studies and investigations pertaining to cost of service and savings to be achieved which ScottishPower testified did not exist at the time of the technical hearing.” Motion to Reopen at p. 2. The Irrigators contend that additional testimony is needed to clarify the affect of this merger credit on ratepayers.
2. Power Outages in Scotland
The Irrigators note that during the winter of 1998-1999, ScottishPower suffered a power outage to 125,000 of its customers in Scotland some of whom were left without power for eight days. The Irrigators argue that this fact was not disclosed by the Applicants in this proceeding and that this outage has “a direct bearing on representations made by [ScottishPower] regarding adequacy of service, and further examination is warranted.” Motion to Reopen at p. 2.
3. Tree Trimming Fatality
The Irrigators contend that they learned that ScottishPower was recently fined 100,000 pounds related to a fatality that occurred from a “failed tree trimming program” in the United Kingdom. This fact, the Irrigators contend, warrants the reopening of the technical proceeding in this case.
4. Tax Savings.
Finally, the Irrigators join in the Motion to Reopen filed by Solutia, Inc. regarding the potential changes in tax liability that might result from the proposed merger between the Joint Applicants. The Irrigators adopt and incorporate by reference the arguments made by Solutia and do not set forth any independent rationale.

Answer of Joint Applicants’
On September 16, 1999, the Joint Applicants filed an Answer to the Irrigators’ Motion to Reopen. The Joint Applicants note that the Irrigators fail to identify what “new evidence” they intend to introduce in this proceeding in the event that their Motion is granted. In fact, the Joint Applicants argue, there is no new evidence which would warrant the reopening of the proceeding. The Joint Applicants further argue that the Irrigators had ample opportunities to elicit evidence in a timely manner regarding the matters discussed in their Motion, but chose not to do so. The 1998-1999 winter storm and the 1998 fatality, the Joint Applicants contend, are events for which information has been publicly available from a number of sources for quite some time and that the Irrigators simply failed to pursue the matter.
The Joint Applicants contend that the proposed merger credit is simple and straight forward. They argue that the ScottishPower shareholders will (assuming the merger is approved) bear the cost of the credit and, consequently, the risk as to whether there will be sufficient savings to support the credit. Idaho’s Utah Power & Light customers will receive the credit on their bills regardless of whether the savings are achieved. The Joint Applicants argue that there is no further need for cost studies and investigations. Finally, the Joint Applicants reiterate their response made to Solutia’s Motion to Reopen with respect to any changes in tax liability that might result from the proposed merger.
Irrigators’ Reply
On September 24, 1999, the Irrigators faxed a Reply Memorandum in further support of their Motion. The Memorandum declares that ScottishPower “falsely” responded to a data request regarding an investigation purportedly initiated in Scotland following the severe winter storm of 1998-1999. In support of their allegations, the Irrigators attached to their Memorandum what appear to be news reports from unidentified sources.

FINDINGS
Merger Credit
On August 20, 1999, the Joint Applicants submitted a Notice of Merger Credit Commitment in which they agree to provide a four-year credit to Utah Power & Light’s Idaho customers of $1.6 million per year for the years 2000 through 2003 for a total credit of $6.4 million. Under the Commitment, the Joint Applicants may reduce or offset the annual $1.6 million merger credit to the extent that cost reductions related to the merger are reflected in rates. The Commitment further notes that the amount of the credit offered in Idaho was calculated using the same percentage of tariff revenues used to calculate the merger credit offered in PacifiCorp’s other jurisdictions where a merger credit is being offered. Thus, under the proposed merger credit, “Idaho customers would receive the same relative benefits as has been offered in other states.”
The merger credit being offered in this case is the result of what became known as the “most favored Nation” provision agreed to by ScottishPower during the technical hearing conducted in July through the testimony of its witnesses. Tr. Vol. II , pp. 78-79; Vol. V, pp. 624-625. The essence of this provision is that ScottishPower would offer at least the same relative benefits or commitments in Idaho that it ultimately offers in other states in pursuit of obtaining approval for its merger with PacifiCorp.
The Commission is well aware of the commitments offered by the Joint Applicants in other jurisdictions and does not find that the merger credit offered in this proceeding is sufficiently complex or raises additional issues that would warrant the reopening of the technical proceeding. This Commission will interpret the proposed merger credit as it sees fit. If we ultimately approve the merger, we will impose whatever terms and conditions as in our judgment the public convenience and necessity requires pursuant to Idaho Code § 61-328.
Power Outage in Scotland
In their Motion to Reopen, the Irrigators themselves note that the severe winter storm causing the power outage in Scotland occurred “eight months ago.” Thus, the Irrigators had ample opportunity to conduct whatever discovery they deemed necessary to shed light on a significant event that was well known and for which information was clearly available through any number of means. The Irrigators’ request to reopen the technical proceeding in this case to analyze a natural catastrophe that occurred last winter is untimely and unjustified.
Moreover, it is highly unlikely that any evidence pertaining to the Scottish storm would be relevant and admissible in the current proceeding. Severe weather catastrophes and resulting power outages are not limited to Scotland or to ScottishPower. During the winter of 1996, for example, an ice storm struck the Inland Northwest causing more than 100,000 of Avista Corporation’s 291,000 electric customers to be without power for periods ranging from several hours to 13 days. During the summer of 1996, much of the Intermountain West experienced several sustained outages caused by various natural phenomena that affected transmission lines. More recently, Hurricane Floyd caused severe damage and extended power outages to the southeastern United States. Many people living in that area are still without electric power as of the date of this Order. These are all events of which the Commission hereby takes “official notice” pursuant to Rule 263 of the Commission’s Rules of Procedure, IDAPA 31.01.01.263. Thus, the mere fact that Scotland and ScottishPower are subject to the same powerful and uncontrollable forces of nature that affect us all does not justify the reopening of the record to introduce new evidence regarding the proposed merger.
Incidentally, the Irrigators’ Reply Memorandum adds little, if any, support to the arguments made in their Motion. The attachments to the Memorandum are completely unidentified and it is unclear whether they constitute news reports or editorials. Regardless, for the reasons stated earlier, we do not find the Scottish storm and subsequent power outage (and possible investigations) to be relevant to our decision whether to approve the merger.
Tree Trimming Fatality
Again, the incident referred to by the Irrigators involving a fatality in the United Kingdom resulting from a tree-trimming program is an event that occurred prior to the technical hearing conducted in this case. The Irrigators had ample opportunity to conduct discovery regarding this event had they chosen to do so. Their request to introduce evidence now, is untimely.
Moreover, we note that electrical facilities throughout the world, regardless by whom they are owned and operated, always constitute a potential threat to human safety. While tragic, it is not out of the ordinary for employees and non-employees of all electric utilities to experience injuries or even fatalities that are somehow related to the operation of electrical facilities. Pursuant to Idaho Code § 61-517, all public utilities are required to provide notice to this Commission of all accidents involving injury or death related to the operation of their facilities. Again, we take official notice of the fact that injuries and deaths have occurred in Idaho from the operation of nearly everyone of this state’s electric utilities. We do not find the fatality referred to by the Irrigators in their Motion, or the fact that ScottishPower was fined for that fatality, to have any relevance to the proposed merger.
Tax Savings
The Irrigators simply incorporate by reference the arguments made by Solutia, Inc. in its Motion to Reopen regarding the potential changes in tax liability that might result from the proposed merger. The Irrigators do not offer any independent argument or facts. In Order No. 28158 issued contemporaneously with this Order, we deny Solutia’s Motion to Reopen the technical proceeding to analyze changes in tax liability that might result from the proposed merger. We simply incorporate herein by reference the rationale set forth in Order No. 28158 and deny the Irrigators’ Motion to Reopen on the same basis.

O R D E R
IT IS HEREBY ORDERED that the Motion to Reopen the technical proceedings in this case filed by the Idaho Irrigation Pumpers Association is denied.
THIS IS AN INTERLOCUTORY ORDER. Any person interested in this Order may file a petition for review within twenty-one (21) days of the service date of this Order with regard to any matter decided in this Order. A petition to review may request that the Commission: (1) rescind, clarify, alter, amend; (2) stay; or (3) finalize this Interlocutory Order. After any person has petitioned for review, any other person may file a cross-petition within seven (7) days. See Rules 321, 322, 323.03, 324, 325 (IDAPA 31.01.01.321-325).
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this
day of September 1999.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Myrna J. Walters
Commission Secretary

bls/O:pace991_bp5

ORDER NO. 28165 1

Office of the Secretary
Service Date
September 27, 1999